Microsoft announced a new set of technologies yesterday that is aimed at making its cloud computing services work in data centres it doesn’t own, such as those run by competitors.
According to Scott Guthrie, Microsoft’s cloud and artificial intelligence chief, the move has persuaded some customers to use Microsoft’s services when they can’t always use Microsoft’s data centres.
For example, Guthrie says, “The Royal Bank of Canada is required by law to keep some of its computing work in-house and uses Azure Arc to connect those facilities to Microsoft’s cloud.
“The challenge with higher-level services historically has been the concern of ‘lock in’ – what happens if I can only use them in your data centre?”, He also adds, “That freedom of movement causes customers to feel much more comfortable using those services.”
The strategy is to build the most profitable cloud software services, such as database tools so that they can run in their own data centres, customers’ data centres, or even competitors’ data centres, such as Amazon’s.
Microsoft executives and analysts say research firm Gartner estimates hit US$64.3 billion and where Microsoft is second only to market leader Amazon.com’s Amazon Web Services.
Vice President Distinguished Analyst at Gartner Ed Anderson says, “Microsoft’s strategy opens doors with customers, but it also forces the company to compete on the quality of its software services rather than on the cost of computing power.
“To be honest, that’s a better way to compete,” Anderson said.
Meanwhile, last week, the company revenue from Azure, its flagship cloud offering, grew 48 percent, results that helped it overtake Apple Inc as the world’s most valuable publicly-traded company.